Other things constant, which of the following would reduce unemployment and raise inflation?
A)The government lowers government spending.
B)Because of low growth abroad, net exports falls.
C)The government raises taxes.
D)Businesses become more optimistic about the future of the economy.

Question

Quizplus · Accepted Answer

Businesses becoming more optimistic about the future of the economy would likely lead to increased investment and hiring, reducing unemployment. This increased economic activity could also lead to higher demand, which might raise inflation.

Other Things Constant, Which of the Following Would Reduce Unemployment